Reserving Ordinary Account Savings For Housing

Housing Schemes are usually financed through savings in the Ordinary Account of the Central Provident Fund (CPF). But a large chunk of Ordinary Account (OA) savings are transferred to Retirement Account (RA) when you turn 55 years old, to meet the Full Retirement Sum requirements. In order to continue funding your housing loan, you need to keep aside a sum in your OA before the transfer to RA is initiated.

How To Reserve Money In OA For Housing:

If you have an outstanding housing loan to pay off, or you wish to take a new housing loan after you turn 55 years old, you can either reserve an amount from the OA, or use the new contributions to OA that will be made after your 55th birthday if you continue working, or use the amount left in RA in excess of the Basic Retirement Sum.

There are 2 ways to reserve money from your OA for housing before the amount. One is to apply for reservation in advance, and another is to do so right before you turn 55 years old. The choice to reserve money in OA has to be made at least 3 weeks before your 55th birthday to ensure that the CPF gets your request and the amount is set aside accordingly. To apply for reserving money for housing in advance, follow the below steps:

Log in to myCPF Online services on the CPF website using your SingPass.

Go to My Requests.

Choose ‘Property’ option.

Select ‘Use CPF for my property’.

Click on ‘Reserve OA monies for housing’.

You need to decide how much money to reserve and provide the correct sum.

If you have turned 54 already and want to set aside money from your OA savings to buy a new property that will be ready after your 55th birthday, you need to submit your request via My e-Concierge. To do so, follow the steps given below:

Log in myCPF Online Services and go to ‘My Requests’.

Select ‘Other CPF matters’.

Choose ‘Submit My e-Concierge request’ and select ‘Housing’ category.

Attach a copy of your ‘Option to Purchase’ or ‘Sale and Purchase Agreement’ for this service to be processed.

In addition, the CPF sends you a ‘Reaching 55 package’ before your 55th birthday, to guide you through the formalities required at this milestone age. The package will contain an application form, which you can fill in with the details of your property, the amount you wish to reserve in your OA, and other particulars. Send the completed form to the CPF Board at least 3 weeks before your 55th birthday for the application to be processed and executed in time.

You can choose to reserve the whole amount or a part of the OA savings for housing loan payments. The CPF will let you know if the amount you want to reserve is more than the amount that needs to be moved to the Retirement Account. The reserved amount is also subject to the housing withdrawal limits applicable to your property.

The reserved amount from OA will be transferred to the Retirement Account under the following circumstances:

6 months after you stop using your OA savings to pay for the housing loan repayments;

6 months after you tell the CPF that the housing loan is paid off;

If you sell the house which you are financing through the reserved OA amount.

How To Use The Reserved Amount For Housing Loan Repayment:

If your housing loan was already being financed through OA savings before you set aside the amount, you need not do anything. The deductions will continue as earlier. However, if you wish to start using your OA savings for loan repayment (that was not earlier being repaid from the ordinary account), you need to:

If your home loan is from a Housing and Development Bank (HDB), go to the nearest branch office of the HDB and fill up the HPS/9 application form.

If your home loan is from any other bank, apply for the loan installments to be paid from OA by logging in myCPF Online Services. Go to ‘My Requests’, and then choose ‘Property’. Click on ‘Use CPF for my property’ and select ‘Commence monthly installment’.

If you are buying a new house with the reserved OA amount, then you need to do the following:

If you are buying an HDB flat with loan from an HDB, go to any HDB branch office with a copy of the loan approval letter and fill up the HPS/9 application form.

If you are buying an HDB flat with loan from another bank, attach a copy of the loan approval letter, fill up the HBL/1 application form and send to:

Central Provident Fund Board

Housing Schemes Department (HSD)

238B Thomson Road

#08-00 Tower B Novena Square

Singapore – 307685

If you are buying a private property, get your lawyers to submit an application to use CPF on your behalf, with a copy of the approval letter.

You can also reserve OA savings for more than 1 property. If you are past your 54th birthday, you can submit your request to use the amount for multiple properties through myCPF Online Services > My Requests > Property > Use CPF for my property > Reserve OA monies for housing. You can also submit a written request, with correct details about the amount to be reserved for each property and the address of the property. The request, along with the RWD-55 withdrawal application needs to be sent to:

Central Provident Fund Board

Retirement Withdrawals Department (55-WDL)

238B Thomson Road

#08-00 Tower B Novena Square

Singapore – 307685

Reserving the OA amount for housing loans is not without implications. This means that you will have less liquid money within the ordinary account, and that the amount transferred to you retirement account will also be less. This could affect the retirement payouts in the future. However, if you continue earning salary after the age of 55, you might be able to make up some of the deficit, depending on the quantum of your monthly wages.